China’s property crackdown: top developer Country Garden posts profit decline
- The Shenzhen-based firm sold 558 billion yuan worth of homes last year, compared to 570.66 billion yuan in 2020
- President Mo Bin says that the company aims to comply with Beijing’s three-red-line loan limit by 2024
China’s largest property developer Country Garden Holdings posted another year of profit decline as cracks widened in the country’s US$1.7 trillion housing market.
The Shenzhen-based company, ranked at the top of its industry by sales in China, reported on Wednesday a core net profit of 26.93 billion yuan (US$4.2 billion) in the 12 months ended December 31, down nearly 17 per cent from a year earlier, when the Covid-19 pandemic broke out.
The firm sold 558 billion yuan worth of homes last year, compared to 570.66 billion yuan in 2020.
In the developer’s filing to the Hong Kong stock exchange, president Mo Bin cited “turbulence and upheavals” in the real estate sector.
“The sector is still at its bottom and we foresee that home sales in 2022 across the country will drop,” said Cheng Guangyu, vice-president of Country Garden, at the developer’s results briefing on Wednesday.
The company did not set a sales target for this year.
China’s housing market has been dampened by the central government’s heightened scrutiny on the elevated debt levels of real estate developers, as well as tighter government control on property purchases and home resales.
Several major developers in the country, led by China Evergrande Group, have joined a list of defaulters since the second half of last year, the latest being Logan Group and Sunac China Group Holdings.